Spire (US:SPIR)2025-12-17 21:10Financial Performance - Annual Recurring Revenue (ARR) decreased by 30% to $72.8 million as of September 30, 2025, down from $103.9 million in 2024 [156]. - The number of ARR Customers dropped by 71% to 162 as of September 30, 2025, compared to 565 in 2024 [162]. - Total revenue for the three months ended September 30, 2025, was $12,670,000, a decrease of $15,898,000 or 56% compared to $28,568,000 in the same period of 2024 [182]. - The company's gross profit for the three months ended September 30, 2025, was $4,643,000, compared to $12,725,000 in the same period of 2024, reflecting a significant decline [181]. - The company's ARR Net Retention Rate decreased to 86% for the three months ended September 30, 2025, down from 90% in the same period of 2024, representing a 4% decline [164]. - Total revenue decreased by $33.1 million, or 37%, for the nine months ended September 30, 2025, primarily due to the sale of the maritime business [186]. - Subscription revenue for the nine months ended September 30, 2025, was $43.0 million, or 77% of total revenue, compared to $58.0 million, or 65%, for the same period in 2024 [187]. - The company reported a net loss of $(19,676,000) for the three months ended September 30, 2025, compared to a net loss of $(12,473,000) in the same period of 2024 [181]. - Net loss for the nine months ended September 30, 2025, was $76,399 thousand, an improvement from a net loss of $54,576 thousand in the same period of 2024 [241]. Business Operations - The sale of the maritime business was completed for approximately $238.9 million, reflecting an increase in the purchase price due to a settlement agreement [140]. - The company was awarded a $2.5 million nine-month contract from NOAA for satellite weather data and an $11.2 million one-year contract for GNSS radio occultation data [148]. - The company aims to expand into new industries such as energy, financial services, and agriculture, as well as new geographies including Latin America and Africa [150]. - The ARR Customers and ARR Solution Customers decreased primarily due to the sale of the maritime business and a strategy to de-emphasize low-revenue customers [159]. - The company has launched new capabilities, including aircraft exposure analytics for weather-related risks and space-based radio frequency intelligence for defense [148]. Expenses and Costs - Research and Development expenses increased to $9,116,000 for the three months ended September 30, 2025, compared to $5,631,000 in the same period of 2024, marking a 62% increase [181]. - Operating expenses totaled $25,694,000 for the three months ended September 30, 2025, slightly down from $26,444,000 in the same period of 2024 [181]. - General and administrative expenses increased by $16.4 million, or 51%, for the nine months ended September 30, 2025, primarily due to higher professional services and stock-based compensation expenses [206]. - Sales and marketing expenses decreased by $3.2 million, or 20%, for the nine months ended September 30, 2025, primarily due to a reduction in personnel costs [202]. - Loss on decommissioned satellites increased to $6.3 million for the nine months ended September 30, 2025, compared to $0.95 million for the same period in 2024 [209]. Cash Flow and Liquidity - Cash and cash equivalents totaled $96.8 million as of September 30, 2025, compared to $19.2 million as of December 31, 2024 [247]. - The company had approximately $20.3 million in cash and cash equivalents as of September 30, 2025, with expected future financial results supporting operational needs for at least the next twelve months [252]. - Net cash used in operating activities was $55.6 million for the nine months ended September 30, 2025, reflecting a net income of $76.4 million and adjustments for non-cash items of $135.7 million [262]. - Net cash provided by investing activities was $142.9 million for the nine months ended September 30, 2025, primarily driven by proceeds from the sale of the maritime business totaling $238.9 million [265]. - Net cash used in financing activities was $75.3 million for the nine months ended September 30, 2025, mainly due to payments on long-term debt of $105.7 million [267]. Market and Economic Conditions - The macroeconomic environment has led to longer sales cycles and additional customer discounts, impacting revenue [145]. - Inflation risk remains a concern, although recent inflation has not significantly impacted operational results for the nine months ended September 30, 2025 [278]. Future Outlook - The company plans to continue investing in growth, including increasing headcount in sales, marketing, and R&D teams [152]. - The company expects operating expenses to increase in absolute dollars as revenue grows, but as a percentage of revenue, these expenses are expected to decrease over time [194]. - The company will lose its "emerging growth company" and "smaller reporting company" statuses starting with the 2025 10-K and Q1 10-Q due to revenue and float changes [273].